Redfin: Rural America Hard Hit by Housing Affordability Woes

(Image courtesy of Tom Fisk/pexels.com)

Redfin, Seattle, released a new report finding that rural homebuyers have been particularly affected by housing affordability issues.

While affordability issues are present for suburban and urban areas as well, the median home sale price in rural areas is up 60.5% from pre-pandemic levels–from $175,000 to $280,900. That compares with 48.9% in suburban areas, from $258,500 to $385,000, and 46.2% in urban areas, from $305,000 to $446,000.

A rural homebuyer would need to earn $74,508 to afford the typical home, up 105.8% from before the pandemic when the measure stood at $36,206.

By comparison, the income needed to afford a home in a suburban area has risen 90.9%, to $102,120 from $53,482. The income needed to afford a home in urban counties has risen 87.5%, to $118,300 from $63,103.

Redfin defines a home as “affordable” if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment.

Income growth hasn’t kept up with the dramatic price bumps. The median household income in rural counties is $69,307, up 33.3% from $52,002 pre-pandemic. Suburban counties have seen a 36.8% increase from $64,782 to $88,627, and urban areas have seen a 39.3% increase from $64,468 to $89,784.

“During the pandemic, many buyers came to New Hampshire from out of state–places like New York, Texas, California and Seattle. They often had larger budgets than locals and were able to pay above the asking price, which helped them win bidding wars and purchase properties in the Lakes Region,” said Julia Martinage, a Redfin Premier real estate agent in New Hampshire. “A lot of those people are now moving back to where they came from and being replaced by locals or people from border states like Massachusetts. I’m seeing a lot of young couples and families moving to rural areas from cities like Nashua and Manchester. They want land, chickens, quiet–a better quality of life.”

Despite the increases, such rural areas do remain more affordable than their suburban and urban counterparts, encouraging potential buyers.

“Rural America isn’t as affordable as it once was, but the silver lining is that unlike many urban areas, there’s still room to build homes,” said Redfin Senior Economist Asad Khan. “Adding more housing can ease the affordability crunch and also make room for more people, which can boost local economies.”